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SAP Education gets a fair amount of questions about the need for and the capabilities of the New General Ledger within the SAP ERP Financials solution.  To give you a better idea of its purpose and benefits, here is some basic information that will hopefully provide some clarity around the subject…

In today’s environment, organizations need to satisfy a wide range of internal and external reporting requirements – and do so quickly. The SAP ERP solution now unites all general ledger applications into a single function to support all internal and external accounting requirements.  As a result, it helps your organization comply with the latest standards for corporate governance, international financial reporting, flexibility, and fast close. Best of all, it adapts easily to the specific reporting requirements of your industry and your enterprise. 

Here are a few of the “New General Ledger” capabilities:

  • Simple mapping of parallel financial reporting
  • Standard enhancements and extensibility (with customer fields)
  • Financial statements by any characteristic (document splitting)
  • Segment reporting
  • Legal and management reporting
  • Transparency and uniformity
  • Real-time CO > FI integration
  • Speeds up period-end closing

The central task of the NewGL accounting is to provide a comprehensive picture of external accounting and accounts. Recording all business transactions (primary postings as well as settlements from internal accounting) in a software system that is fully integrated with all the other operational areas of a company ensures that the accounting data is always complete and accurate.  Beyond fulfilling the legal requirements, General Ledger Accounting also fulfills other requirements for modern accounting:

  • Parallel Accounting – General Ledger Accounting allows you to perform parallel accounting by managing several parallel ledgers for different accounting principles.
  • Integration of Legal and Management Reporting – In General Ledger Accounting, you can perform internal management reporting in parallel with legal reporting. For this purpose, the Profit Center Accounting functions are integrated with General Ledger Accounting. Furthermore, you can generate financial statements for any dimension (such as profit center).
  • Segment Reporting – General Ledger Accounting supports the segment reports required by the accounting principles IFRS (International Financial Reporting Standards) and US GAAP (Generally Accepted Accounting Principles). For this purpose, General Ledger Accounting contains the Segment dimension.
  • Cost of Sales Accounting – You can perform cost of sales accounting in General Ledger Accounting. For this purpose, General Ledger Accounting contains the Functional Area dimension.

Prior to SAP ERP, SAP customers had to install and operate many different components to meet international (or industry-specific) requirements and standards as completely as possible.  In fact, the situation is worsening because more and more service providers (in the public sector, insurance, and media sectors, for example) are demanding balance sheets based on additional criteria – such as grant, fund or industry.

The increasing importance of IAS/IFRS and/or US GAAP as (generally recognized) accounting principles is also heightening the need for improved quality and mapping options of segment reporting, or improved mapping and evaluation of the complete posting data.  Furthermore, a unified solution would undoubtedly also be a bonus for tackling issues such as Fast Close and Sarbanes-Oxley.

Key benefits of using SAP ERP Financials New General Ledger capabilities include:

  • Convergence – SAP ERP supports the growing trend toward the convergence of financial accounting and controlling.
  • Unified reporting – You can create reports in compliance with a variety of requirements. These include international regulations such as IAS/IFRS, country-specific regulations such as United States Generally Accepted Accounting Principles, and any requirements specific to an industry or enterprise.
  • Real-time reconciliation – Through a real-time connection, postings in controlling can pass immediately to the general ledger, without the need to trigger other programs. As a result, controlling and general ledger accounting are always reconciled.
  • Fast close – By concentrating data under a single umbrella, SAP ERP yields greater transparency for auditing and corporate governance purposes. In addition, it accelerates period-end closing to help you achieve fast close.
  • Minimal training – Because SAP ERP retains many features of the familiar SAP software interface, experienced users will require little or no training.
  • Lower costs – Easy to set up and operate, the general ledger capabilities of SAP ERP help reduce your total cost of ownership.

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To learn more about SAP Financials – New General Ledger solution I recommend you try the AC210 and AC212 training courses provided within SAP Education’s Financial Accounting Learning Map

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